Popular microblogging platform Twitter has filed the paperwork necessary for its initial public offering (IPO) and stock market floatation. The news broke, via Twitter, in a characteristic 135 character message: “We’ve confidentially submitted an S-1 to the SEC for a planned IPO. This Tweet does not constitute an offer of any securities for sale.” However in the 12 hours since this initial communication investors haven’t seen any further official information about key aspects of the business going forward, like the current state of the business, how much money it is hoped will be raised or any practicalities concerning the sale mechanics.
Making at least three multi-millionaires
Market analysts think that Twitter will be able to raise around US$10 billion from the sale of shares in the company. This huge sum will allow backers of the company thus far, who have contributed around US$1.2 billion to finance the growth of the company, to get some return on their investments. Also it is expected that the three founders, Messrs Williams, Dorsey and Stone, will net hundreds of millions of dollars each.
IPO could happen next month
A lawyer speaking to the FT says that Twitter may have filed confidentially two months previously which could mean the shares will surprise Wall Street traders in an early appearance, as soon as next month. The IPS prospectus, with thorough details of the business, projections and plans, needs only be revealed three weeks before the IPO date.
The BBC reports that Twitter is expected to post $583 million in revenue for 2013. This is a sum that the Twitter management are pushing to build upon as the company has been investing heavily in mobile advertising technology to make the most of its popularity on smartphones and tablets. An example is the recent acquisition of MoPub for $350 million. The extra cash coming in from the IPO could give Twitter a lot more purchasing power to accelerate growth and compete successfully against giants such as Google, Microsoft and Facebook.
Twitter HQ, shortly after the announcement
Twitter, which launched in 2006, has been described as “the SMS of the Internet” and currently has over 200 million active users.
